46% of SMEs on track for business growth: ScotPac

According to the results, only 46 per cent of the respondents said they were on track to hit their business targets for this calendar year. 

For smaller SME respondents, those earning between $1 million and $5 million, roughly half (50.1 per cent) reported as being on track.

As highlighted by the non-bank, staff shortages were a significant influence on this lack of momentum, with 40 per cent of these affected businesses nominating a lack of employees as a major contributing factor. 

This appears to have impacted larger SMEs with cooled growth more so, with staff shortages said to be hitting almost half (48 per cent) of those earning between $5 million and $20 million in revenue.  

COVID-19 restrictions were also listed as a significant issue for large and small SMEs alike, with 28 per cent of those unconfident of meeting their revenue targets for the year reporting restriction and COVID-19 prevention measures as a contributing factor. 

Further, 25 per cent said that “depressed demand for services or products” was also an explanation for their stifled growth, while 18 per cent pointed the finger at supply chain disruptions.  

However, ScotPac’s findings also suggest that access to finance was a key factor for businesses struggling to meet their business expectations for the year. 

According to the results, one-third of the impacted respondents noted poor access to finance was a reason for being unable to reach their revenue targets, with the average waiting time for a loan between a month and 35 days.

The same survey also noted that 18 per cent were impacted by “those earning between $5 million and $20 million in revenue” including the SME Loan Recovery Scheme. 

ScotPac chief executive Jon Sutton commented that this report “reinforces the fact that many SMEs need support”, including fast access to working capital.

Separate findings have flagged concerns over funding access, with data released by Banjo Loans in May noting that 19 per cent of SMEs believe access to funding is a key barrier to their growth. 

The same data also suggested that only 40 per cent of SMEs chose bank loans as funding sources.

According to chief executive of Earlypay Daniel Riley, the number of businesses contacting the financial provider for assistance is increasing. 

Mr Riley said these concerns orbit businesses being declined by banks for loans, increase in operating expenses, and supply chain disruptions. 

“Our research shows that a lot of businesses are struggling to manage cashflow gaps due to delays in getting stock in the door and the rising cost of doing business,” Mr Riley said.

“My strong advice to business owners is to act now.

“Do not wait to see if things will pass as market conditions are forecast to continue for the next 12 months.”

[Related: Almost two-thirds of SMEs struggling to secure funding: Banjo]